Review Article on Impact of ATM Service on Customer Satisfaction

Trends in Technical & Scientific Research

Benyam Tadesse* Department of Agricultural Economics, Mizan-Tepi University, Ethiopia Submission: April 23, 2018; Published: May 17, 2018 *Corresponding author: Benyam Tadesse, Department of Agricultural Economics, Mizan-Tepi University, Ethiopia, Tel: Email:

Keywords: Customer satisfaction; Banking industry; ATM; Credit card; Debit card; Internet banking; Mobile banking; Electronic fund transfer; Electronic clearing services; Financial transaction; Local currency; Independent variables; Dependent variable; ATM banking; ATM cards; ATM stations; ATM issues.

Abbreviations: ATM: Automated Teller Machine; PC: Personal Computer; PDA: Personal Digital Assistant; EBH: Extended Business Hours; EFT: Electronic Fund Transfer

Introduction

Background of the study London, United Kingdom) on 27 June 1967 [1]. In banking industry, e-services are revolutionizing the way used by Barclays Bank (Barclays Bank in Enfield Town in North ATM is designed to perform the most important function of business is conducted. Electronic based business models are bank. The plastic card is replacing cheque, personal attendance replacing conventional banking system and most banks are of the customer, banking hour’s restrictions and paper based rethinking business process designs and customer relationship management strategies. It is also known as e-banking, online Transfer. ATM itself can provide information about customers banking which provides various alternative e-channels to verification. ATMs are used as spring board for Electronic Fund account and also receive instructions from customers-ATM using banking services i.e. ATM, credit card, debit card, cardholders. An ATM is an Electronic Fund Transfer terminal internet banking, mobile banking, electronic fund transfer, capable of handling cash deposits, transfer between accounts, electronic clearing services etc. however, as per e-banking balance enquiries, cash withdrawals and pay bills [2]. scenario ATM and mobile banking are most acknowledged than other e-channels [1]. In many parts of the world the majority of bank customers regularly use Automatic Teller Machines (ATMs) and today’s Automated Teller Machine (ATM) refers to a machine that western youth have not known a world without them. For them, acts as a bank teller by receiving and issuing money to and from the prevailing Perception of a cash machine is that of a tool the ATM account holders/users. ATM means neither “avoids traveling with money” nor “any time money,” but certainly and dispensing cash. The technology is hidden from sight; the implies both. ATM cards are fast replacing confounding providing a familiar functionalit y of basic financial information computer is invisible. It has taken approximately 30 years withdrawal forms as a convenient way of getting your money to establish ATMs as ubiquitous examples of public walkup- and-use devices. The adoption has not been straightforward, transaction. A smart person no longer needs to carry a wallet- from banks. In a way, they are rewriting the rules of financial requiring trust in the technology and willingness to modify full of paper money; rather, what he/she needs to do is to behavioral strategies in the very sensitive domain of her pocket, insert it in the slot of the machine, punch in a few fish out an Automated Teller Machine (ATM) card from his/ sometime coercive, role in encouraging ATM adoption. The details and go home with hard cash [1]. personal finance. Financial institutions have played a major, The history of ATM can be traced back to the 1960s, when and money readily available. This culture is composed of ATM flourishes within societies where time is precious John Shepherd-Barron who was managing director of De La Rue individuals, who have personal bank accounts and access to a wide range of technology. For these individuals, ATMs are

Instruments invented the first ATM machine. That machine

Trends Tech Sci Res 2(1): TTSR.MS.ID.555577 (2018) 004 Trends in Technical & Scientific Research

convenient and reliable everyday artifacts: push a few buttons prior to a purchase with performance after a purchase [5]. and get the money. As ATMs cross-new borders and pervade Halstead et al (1994) states that customer satisfaction is different cultures, it is imperative to understand the role of cultural characteristics on people’s Perception of, attitudes comparison of product performance to some pre-purchase a transaction specific effective response from customers’ towards, and action on, the machine. This understanding is standard. ATM banking customers have expectations of their instrumental in facilitating technology uptake and improving banks’ ATM banking services against which each service encounter enhances comparison of ATM banking performance context into products designed for different cultures [3]. to the expectations. The comparison is conducted after the design localization, or the process of infusing a specific cultural immediate usage of ATM banking services or over time of ATM banking usage. and we must understand the new users who live within a In Africa, ATMs are being introduced for the first time culture, which may bring new factors into the adoption curve. Customer satisfaction with ATM banking is therefore the It concentrates on urban Africa but the approach can be feeling developed from an evaluation of the ATM banking use generalized to cover other public (and personal) technologies, experience whether the ATM banking performed relatively as well as other developing markets. African Banking well or poorly against expectations. Churchill GA & Surprenant industry is witnessing an unprecedented competition. To stay ahead, banks are coming up with plethora of services to lure or usage evaluation. Look at customer satisfaction as a [5] defines customer satisfaction as the overall post purchase customers. Services like 24hour banking, service at door step, summation of satisfaction with various attributes of a product telephone banking, internet banking, Extended Business Hours which alludes to the fact that satisfaction with ATM banking (EBH), speedy processing are only a few to mention. Greater will come from the satisfaction with the performance of its part of today’s bank transactions take place somewhere else attributes. The evaluative judgment about satisfaction with other than in branch premises [1]. ATM banking is therefore conceived to fall somewhere on a

Though, the aim of these services is to satisfy customers, of satisfaction (expectations exceed performance perceptions) there is a need to understand customer awareness, Perception bipolar continuum where at the lower end it signifies low levels and importantly the level of satisfaction. Efforts are directed (performance perceptions exceed expectations). This to attract and retain customers by offering them a basket of and at the higher end it signifies a higher level of satisfaction evaluative judgment occurs at a particular time based on usage tailor made schemes supported by a state of the art distribution experience of ATM banking which occurred at a particular time system (the ATMs). The whole exercise is helping banks to or on accumulated experience of ATM banking. serve their customers fast and avoid human intervention totally. And for the customers, ATMs offer hassle-free cash The concept of customer satisfaction has in general become of particular importance because various empirical researchers and fresh notes. The total cash movement through ATMs in have shown that it is an antecedent of customer retention [6] withdrawal. No more fighting with the bank’s teller for change Africa is already between Millions of shillings (local currency) every year. In future, things are going to be even more different that increases market share [6] the corporate image of the firm and challenging. The ATM has become a medium for non-cash or expand customer base of ATM banking, holding other factors and long term profitability. Banks would expect to retain and/ transactions such as payment of bills, insurance payments, constant, if the ATM banking performance meets customers’ printing of statements or even accessing the internet [1]. expectations or surpasses expectations. Automated teller machine (ATM) banking is a popular Electronic banking access channel to banking products and services behind Electronic banking is a form of banking business that branch banking. Banks have been offering more access points provides banking services to individuals and corporate entities, to newer ATM technologies that are faster, secure and with a which are offered and performed with the use of computer wider range of services that include cash depositing to achieve networks and telecommunications media (electronic support). competitive advantage through the ATM banking. To retain Electronic banking includes conducting banking activities using information and telecommunication technologies. is of essence. As such the concept of customer satisfaction bank profitability, expanding the base of satisfied customers E-banking now becomes a virtual banking counter that the individual and corporate customer to carry out the regular and what makes customers satisfied is an area of frequent banking activities [6]. The term electronic banking is used to market studies. Knowing the factors that influence customers’ describe the provision of information or services by a bank to to deployment of ATM technologies. satisfaction with ATM banking is of significance when it comes its customers, via a computer or communication technologies Concept of customer satisfaction [6], conducting banking activities using information and telecommunication technologies [7], a group of electronic system or equipment called electronic fund transfer system, which results from customers’ comparison of expectations Mwatsika [4] define customer satisfaction as a mental state

005 How to cite this article: Benyam T, Review Article on Impact of ATM Service on Customer Satisfaction. Trends Tech Sci Res. 2018; 2(1): 555577. Trends in Technical & Scientific Research which involves the application of advance computer and Measuring customer satisfaction communication technologies for effecting payment systems There are three dominant paradigms to the measurement of customer satisfaction [12,13]. The Importance-performance or businesses, to access accounts, transact business, or that enable financial institution customers, individuals approach [14] proposes that customer satisfaction with a product or service is a composite of (1) the perceived importance through a public or private network, including the Internet obtain information on financial products and services the customers’ beliefs about the degree to which the product information or services by a bank to its customers, describes of a range of the product/service attributes or benefits and (2) [6,7]. Electronic banking can be defined as the provision of or service has each attribute. When the perceived performance it as an electronic connection between bank and customer in of the product or service is measured, the importance scores are weighed against the performance scores on each attribute [7]. Daniel [8] described electronic banking as the provision order to prepare, manage and control financial transactions to determine the product or service strengths or weaknesses. of banking services to customers through Internet technology. The importance-performance approach enables the traditional banking products and services directly to customers researcher to analyse whether the product or service has or E-banking is also defined as the automated delivery of new and through electronic, interactive communication channels performs in attributes considered important by the customer (user). Thereby if the product/service performs in attributes business model that involves the use of modern information considered important by customers (users) then the product/ [6,9]. Furthermore, e-banking is defined as a contemporary and telecommunication technologies in carrying out banking service has more chances of satisfying customers (users) and subsequently retaining them for repeat purchases and business hours a day, 365 days in a year [9]. growth. This is a very interesting conception of customer transactions from home, the office, or from business trip, 24 satisfaction that has received considerable empirical support For customers, e-banking provides current information, in literature according to Sheppard. 24-hours-a-day access to banking services (Hamid, 2012; [9]. Customers access e-banking services using an intelligent The second measurement approach to customer satisfaction electronic device, such as a Personal Computer (PC), Personal Digital Assistant (PDA), Automated Teller Machine (ATM), & Thanassoulis [13]. This approach is based on the proposition is the Expectations-performance disconfirmation by Portela M internet [6]. Electronic distribution channels provide that customers evaluate or measure their satisfaction with a alternatives for faster delivery of banking services to a wider product/service by comparing preconception expectations range of customers [10]. with post-consumption perceptions (performance). This is the basis of the SERVQUAL (Service Quality) measurement model Electronic banking is an attempt to merge a number of by Parasuraman et al. [15]. different technologies (electronic cash, ATM, POS/EFTPOS terminals, credit cards, home banking, online banking, The SERVQUAL model allows customers to rate the Internet banking, mobile banking, etc.), each of them evolved product/service on a set of general attributes presented on in a different direction and in a different way, with the aim of a Likert scale to measure their expectations of and their providing various banking products and services to end-users perceptions of the performance of product/service attributes [11]. Telephone banking provides services such as account to measure customer satisfaction. Performance only by Cronin balances, instruction to issue bank cheques, account payments. JJ & Taylor [12] is the third approach to measurement of While ATM, the most frequently used electronic distribution customer satisfaction. This approach challenges the previous channel, allows customers to perform their main banking two approaches by proposing that customer satisfaction is transactions, such as deposits and withdrawals, 24hours a affected by the customers’ perceptions of the performance day. Furthermore, internet banking allows consumers to check of the product/service only. This approach ignores the account balances, conduct credit card payments/transfers, importance [14] and customers’ expectations [13] in the transfer funds and account payments. measurement of customer satisfaction. Cronin JJ & Taylor [12] conceptualization of this measurement approach is the basis of SERVPERF (Service performance) model which is a Likert scale E-banking services have provided numerous benefits for where customers measure their perceived performance only electronic banking services is better branding and improved both banks and customers. The first benefit for banks offering of the product/service general attributes to determine their responsiveness to the market [1]. Tillya [1] observed that the satisfaction with the product/service. The continuing debate in main advantage of e-banking is a new distribution channel literature for the merits of SERVQUAL and SERVPERF and vice providing improved services to customers, as well as the use of versa, support SERVPERF, the performance based paradigm electronic commerce strategies. The development of e-banking has greatly helped banks to minimize their overheads, charges and service costs. Many routine services and tasks have now overHowever, SERVPERF, both the measurement disconfirmation approaches, based paradigm. SERVQUAL and SERVPERF, subscribe to the conceptualization that the product/ been fully computerized and are quicker and more efficient.

006 How to cite this article: Benyam T, Review Article on Impact of ATM Service on Customer Satisfaction. Trends Tech Sci Res. 2018; 2(1): 555577. Trends in Technical & Scientific Research

service is a bundle of attributes (features) whose performance quality determines the level of customers’ satisfaction with ability to inspire trust and confidence; and empathy is caring, the product/service. The customers’ satisfaction comes from individualizedThe study attentionadopted 25the attributesfirm provides of ATMits customers banking [21].from the overall judgment about the product/service superiority by comparing attributes’ importance with performance [14] or quality for the analysis of the factors that affect customers’ comparing expectations of attributes with performance [13] empirical studies falling into the five dimensions of service satisfaction with ATM banking and will be operationalized or performance of attributes only [12]. through a multiple scale performance measurement ATM Banking Attributes instrument. Research Model features (attributes) [13] that bears ability to satisfy implicit or Marketing literature defines a product/service as bundle of The literature review informed the study that a product/ explicit needs/wants of customers. Service quality is therefore service such as ATM banking is a bundle of features/attributes a measure of how well a product/service is delivered to meet (Stanton et al, 1991) that bears the ability to satisfy implicit or the expectations of customers [13]. explicit needs/wants of customers. These features/attributes Literature thus asserts service quality as an antecedent to customer satisfaction [3]. Similarly, ATM banking is a product/ responsiveness, assurance and empathy [15]. Service are categorized into five dimensions; the tangibles, reliability, service that has attributes/features that meet implicit and/ quality refers to how well these product/service features/ or explicit needs of bank customers. To achieve customer attributes deliver to meet the expectations of customers satisfaction the attributes have to deliver service quality to about the product/service. Therefore the performance of customers’ expected threshold. Therefore before customer the features/attributes of products/services in each service satisfaction is delivered through ATM banking, managers quality dimension determines customers’ satisfaction with ought to understand the features/attributes of ATM banking the product/service as depicted in This therefore formed that provide service quality because these are the factors that the research model in conceptualizing, categorizing and satisfaction [16]. satisfaction with ATM banking. influence performance superiority [13] to influence customer analyzing the performance of factors that influence customers’ Various empirical studies Al-Hawari M [11], Lovelock CH There were 25 attributes/features of ATM banking that were adopted from empirical studies [1, 11]; [17-20] and ATM banking attributes that were adopted by this study. These [17], Moutinho [18], Yavas U [19]; and Davies F [20]; identified attributes include number of ATMs per ATM station; issuance attributes/features as follows: the tangibles aspect comprised were classified into the five dimensions of product/service of clean notes; readable slips; accessibility to a wide range of of (1) number of ATMs per ATM station, (2) convenient location, banking services via ATMs, appearance of corporate branding (3) corporate brand appearance on ATMs, (4) readable ATM on ATMs, cleanliness of ATMs and ATM stations; ease of slips, (5) issuing of clean notes and (6) cleanliness of ATMs and application process for ATM cards; privacy when using ATMs; ATM stations [21-26]. advice on ATM usage and ATM security; employee accessibility The reliability aspect comprised: to solve ATM problems; convenient location of ATMs; ATM fees; security at ATM stations; bank employee friendliness when 1) Range of services at ATMs, assisting on ATM issues; quick replacement of lost cards; fast 2) Accuracy of ATM transactions, return of swallowed cards; employee speed in responding to ATM problems; employee effectiveness in solving ATM 3) Speed of ATMs, problems; waiting times at ATMs; ATMs not out of order; 4) ATMs not out of order, accuracy of ATM transactions; cash availability in ATMs; speed of ATM transactions and user friendliness of ATM systems. 5) ATM system usability and

There were a total of 25 ATM attributes adopted from the 6) Ease of access to ATMs. empirical studies. These ATM banking attributes fall within The responsiveness aspect comprised: 1) Cash availability in ATMs, tangibles, reliability, responsiveness, assurance and empathy. the five dimensions of service quality [15] that include: Tangibles are the physical facilities, equipment as well as 2) Quick replacement of lost ATM cards, appearance of personnel; reliability is the ability to perform the 3) Waiting times at ATMs, promised service dependably and accurately; responsiveness is willingness to help customers and offer prompt service; 4) Fast return of swallowed ATM cards, assurance is knowledge and courtesy of employees and their 5) Employee speed in dealing with ATM problems, and

007 How to cite this article: Benyam T, Review Article on Impact of ATM Service on Customer Satisfaction. Trends Tech Sci Res. 2018; 2(1): 555577. Trends in Technical & Scientific Research

6) Employee effectiveness in solving ATM problems [27- 10. 30]. services companies to changes in Market conditions as a result e-commerce.Hughes T (2001) International Market orientation Journal of andBank the Marketing response 19(6): of UK 222-231. financial Assurance dimension comprised: 11. Al-Hawari M, Ward T (2006) The effect of automated service quality 1) Privacy at ATMs, retention. Journal of Financial Service Marketing 10(3): 228-243. on bank financial performance and the mediating role of customer 2) ATM usage and ATM security advice, and 12. Cronin JJ, Taylor SA (1992) Measuring service quality: A reexamination and extension 56(3): 55-68.

dimension comprised: 13. 3) Security at ATM stations and finally empathy bank branches and its decomposition into technical and allocative a. Employee friendliness. components.Portela M, Thanassoulis European EJournal (2005) of Profitability Operational of Researcha sample of162(3): Portuguese 850- 866. b. ATM fees. 14. Fishbein M, Ajzen I (1975) Belief, attitude, intention and behavior: c. Ease of ATM card application process. An introduction to theory and research. Addison-Wesley, Reading, Massachusetts. d. Employee accessibility to solve ATM issues [31-33]. 15. Parasuraman A, Valarie AZ, Leonard LB (1985) A conceptual model of service quality and implications for future research. Journal of Conclusion Marketing 49(4): 41-50. Many literatures predicted that all 25ATM banking 16. Swan JE, Combs LJ (1976) Product performance and consumer attributes that were proved to provide a perfect model satisfaction: A new concept. Journal of Marketing 40(2): 25-33. for predicting customers’ satisfaction with ATM banking, 17. Lovelock CH (2000) Functional integration in service: understanding the performance of ATM banking attributes (independent the links between marketing, operations, and human resources. In variables) and customers’ satisfaction (dependent variable) Swartz TA and Iacobucci D (Eds.), 18. Moutinho L, Brownlie DT (1989) Customer satisfaction with bank of ATMs, accuracy of ATM transactions, ease of access to ATMs, services: a multidimensional space analysis. International Journal of identifies ATM fees charged, ATMs not out of order, cleanliness Bank Marketing 7(5): 23-27. readable slips, convenient location, employee accessibility to solve ATM problems, privacy at ATM stations, employee speed 19. Yavas U (2004) Relationship between service quality and behavioural outcomes: A study of private bank customers in Germany. The in solving ATM issues, ease of application process for ATM International Journal of Bank Marketing 22(2): 144-157. cards and cash availability in ATMs as the key factors that 20. Davies F, Moutinho L, Curry B (1996) ATM users attitudes: A neural . network analysis. Marketing Intelligence & Planning 14(2): 26-32. Referencesinfluence customers’ satisfaction with ATM banking 21. Sachdev SB, Verma HV (2004) Relative importance of service quality dimensions: A multi sectoral study. Journal of Services Research 4(1). 1. the Requirements for the award of Master’s Degree of Science in 22. Baker J (2001) Evaluating the impact of development projects on AccountingTillya JJ (2013) and Finance A Dissertation of Mzumbe submitted University. in Mzumbe, Partial/Fulfilment Tanzania. of poverty: A handbook for parishioners. Washington, D.C. 2. 23. Becker S, Caliendo M (2007) Observational Studies (Vol. 7). Magazine 68-71. Hood J (1979) Demographics of ATMs, Banker’s Magazine. Banker′s 24. Becker S, Ichino A (2002) Estimation of Average Treatment Effects 3. Anderson EA, Sullivan M, Anderson (1993) The Antecedents and Based on Propensity Scores. The Stata Journal 2(4): 358-377. Consequences of Customer Satisfaction for Firms. Marketing Science 12(2): 125-143. 25. Caliendo M, Sabine K (2008) Some practical guidance for the implementation of propensity score matching. Journal of Economic 4. Surveys 22(1): 31-72. ATM Banking. International Journal of Academic Research in Business andMwatsika Social Sciences C (2016) 6(2). Factors Influencing Customer Satisfaction with 26. Dehejia R, Wahba S (2002) Propensity Score Matching Methods for 5. Churchill GA, Surprenant C (1982) An investigation into the Statistics 84(1): 151-161. determinants of customer satisfaction. Journal of Marketing Research Non-Experimental Causal Studies: The Review of Economics and 19(4): 491-504. 27. Methodological Issues”. 6. Goi CL (2005) E-Banking in Malaysia: Opportunity and Challenges. Karlan D, Godberg N (2006) The Impact of Microfinance: A Review of Journal of Internet Banking and Commerce 10(3). 28. Khan (2010) Empirical Study of Automated Teller Machine Service Quality and Customer Satisfaction in Pakistani Banks. European 7. Karjaluoto H (2002) Electronic Banking in Finland, Consumer Beliefs, Journal of Social Sciences 13(3): 333-344. Attitudes, Intentions, and Behaviors. Jyvaskyla Studies in Business and Economics 18: 91-118. 29. 8. Daniel E (1999) Provision of electronic banking in the UK and the andMols Policy N (2000) 10(1): The 7-18. internet and service marketing-the case of Danish Republic of Ireland. International Journal of Bank Marketing 17(2): retail banking. Internet Research: Electronic Networking Applications 72-83. 30. Rosenbaum P, Donald BR (1983) The Central Role of the Propensity Score in Observational Studies for Casual Effect. Biomertica 70(1): 41- 9. Rahimuddin M, Bukhari SA (2010) Banking System in Pakistan. 55. Blekinge Institute of Technology, Ronneby, Sweden.

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009 How to cite this article: Benyam T, Review Article on Impact of ATM Service on Customer Satisfaction. Trends Tech Sci Res. 2018; 2(1): 555577.